Wednesday, November 4, 2009

Wives of promoters of Vantis tax scheme also facing charges

I was shocked to note that the wives of the two Vantis directors who are accused of organising a multi-million pound tax scam appeared in Court yesterday along with their husbands. The wives are accused of involvement in their husbands' dealings.

This follows the reports last month about which I wrote on the TaxBuzz blog here: Vantis tax advisers to face charges of “cheating" re tax scheme.

Now it just so happens that I used to work with two of the accused when we were all at what was then WJB Chiltern plc (which is now owned by BDO). Although I haven't spoken to either of them for some years I know that, based on the way that they dealt with things in my day, I wouldn't anticipate that they knowingly instigated, arranged or become involved in anything illegal. In those days the idea of their wives being involved in their tax advisory affairs would have been fanciful. I should stress that I can pass no comment on what may have happened in the lead up to this case.

As regards the tax scheme, scam or evasion of which they are accused however I can make some reasonable assumptions. I am, for example, pretty sure that they would only have proceeded with promotion of this scheme if they had first secured a solid Counsel's opinion. Possibly more than one. I would expect that they had disclosed everything necessary for those Opinions to be worthwhile and sufficient for them to advise clients by reference thereto. Such Opinions are routinely sought and highlighted by the promoters of schemes to evidence the legality of the plans and to ensure that the promoters and those involved should be safe from prosecution for tax evasion. I also doubt that the accused went 'Opinion shopping' as some promoters do in an effort to find a Counsel who will give the desired Opinion.

Indeed the two Vantis directors know more about tax and the issues relevant to schemes on which they might advise than many promoters I have encountered over the years. So what has happened here?

For the moment I tend to hope that they are simply the victim of a more aggressive stance taken by HMRC.

For the same reason I'm sure that this prosecution is one which the promoters of other aggressive structured tax avoidance schemes will dismiss whilst they continue to promopte their own structured tax avoidance schemes.

Other promoters will suggest this is simply an HMRC tactic intended to scare people away from the arrangement of aggressive tax schemes. They will argue that HMRC are exceeding their powers and that this is a one-off never to be repeated case.

Promoters may also seek to cast aspersions as to the technical competence and ability of the accused in this case. And yet, as I have indicated above, unless they have changed, they cannot be dismissed as loose cannons, novices or crooks who recklessly promoted a fraudulent scheme.

Finally, of course, some promoters of structured tax avoidance schemes will distinguish theirs as not being so aggressive as to ever warrant such a prosecution. I would imagine that the accused in this case would have said exactly the same thing had they put their minds to it when advising clients when they first started promoting the scheme back in 2004.

I have to say that even if I were bullish about such schemes generally (and evidently I'm not) the prospect of my wife being dragged into any legal proceedings would have the, no doubt, desired effect.

What say the readers of this blog?


  1. Dragging the wives into the case looks like victimisation. I'm appalled that HMRC would do this.

    This development must make accountants and tax advisers even less attractive as life-partners, as if the grey-suits and lack of imagination weren't enough of a disadvantage in the marriage market!

  2. Mark, whilst declaring an interest in that I also worked at WJB Chiltern with both you and the Vantis directors concerned, I agree with every point you make. I am sure that the scheme was checked and probably tweaked by Counsel as thought necessary.

    The climate has changed and I would not recommend such artificial tax saving devices, but am shocked that HMRC think that any sort of criminal prosecution is appropriate, and especially appalled that the spouses have also been charged.

  3. I do not think anyone is suggesting the wives were involved in the instigation of the acts complained of, but they were possibly involved as shareholders in one or more sateltite companies or whatever structure was adopted. They may, therefore, have been indicted for POCA reasons, as well as for strategic purposes; men who drag their "innocent" wives and children into their sordid dealings are not known to elicit much sympathy from a jury.

    Also, it is not HMRC but RCPO which has the say on bringing the prosecution.

    I have no interest to disclose, and am indifferent to the individuals concerned. It is the court's job to determine their innocent or guilt,and no one else's. What, however, is of interest is if, and when, Vantis comes into the picture ? Are we really saying that the individuals were on a frolic of their own and that Vantis was not, in any way, involved, or fixed with knowledge of what was going on ? Wilful blindness, and all.

  4. I do not imagine that HMRC would be able to charge spouses who had no involvement. It is all speculation without the facts, but if indeed spouses signed any documents then it is not necessarily victimisation.

    That is not to say that the charges are justified. (Time will tell, but I would not want to have to convince a jury of my innocence, in a criminal trial, when HMRC are so willing to deliberately blur the very clear dividing line between avoidance and evasion). If it was a tactic by HMRC to dissuade others, as your article implies, it would be outrageous.

  5. When I am wrong, I admit it.
    A postscript to the above post, in the light of the successful prosecution of Messrs Perrin and Faichney:
    (The cases against their wives were dropped)